DAX slightly higher before ECB interest rate decision, oil price remains above $100

After the recent price slide, the broker IG estimates the German leading index 10 points higher to 25,586 points before the start of Xetra trading. Yesterday the DAX ended trading with a discount of 1.7 percent to 25,576 points. The reason was the renewed escalation in the Middle East. It drove the price of Brent oil above the psychologically important mark of $100 per barrel for the first time since mid-July.

Investors feared a long-term disruption in oil supplies, which could drive energy prices further higher - with consequences for consumer prices.

That's why today is all about the European Central Bank's interest rate decision. The decision will be announced in the early afternoon at 2:15 p.m. Inflation in the euro zone recently rose to 3.3 percent. The financial markets are therefore expecting the ECB to increase the key interest rate to 2.5 percent in order to curb inflation.

“An interest rate increase of 25 basis points is fully priced into the market, anything else would be a big surprise,” comments Wolfgang Bauer, fund manager at Royal London Asset Management. The crucial question would therefore be: "Does the September move, after the first hike in June, mark the completion of a short, precautionary tightening of monetary policy or the transition to a longer cycle of interest rate increases," said the expert.

For savers, higher interest rates mean that they can expect higher interest rates on current or fixed-term deposit accounts. However, if saving is worthwhile, it curbs consumption. Building interest and loans, on the other hand, are becoming more expensive.

The higher interest rates mean that investments become more expensive for companies and costs rise. These higher costs could end up with consumers. This in turn is likely to put a strain on the economy. The central bank must therefore try to walk a tightrope and combat inflation without strangling the economy too much.

One reason for the high inflation is the high energy prices. No relief is expected here for the time being. The fear of an expansion of the Middle East conflict has recently driven up oil prices significantly again. Concerns about global supply shortages due to the expansion of the Middle East conflict, which now also includes fighting between Saudi Arabia and the Houthi rebels in Yemen, are supporting prices at a high level.

On the raw materials market, Brent crude oil from the North Sea fell by 0.2 percent today to $101.03 per barrel (159 liters), but remained above the psychologically important $100 mark. US oil WTI was 0.2 percent higher at $96.22.

Concerns about rising oil prices and higher bond yields caused Wall Street to suffer price losses on Wednesday. The Dow Jones closed 0.8 percent lower at 52,381 points. The broader S&P 500 fell 0.5 percent to 7,636 points. The Nasdaq technology exchange index lost 0.6 percent to 26,253 points.

Stock markets are also falling in Asia. In Tokyo, the Nikkei index, which includes 225 stocks, fell 0.8 percent to 64,597 points, while the broader Topix was 0.3 percent lower at 4,032. Investors in China also held back: the Shanghai stock exchange lost 0.1 percent to 3,946 positions. The index of major companies in Shanghai and Shenzhen fell 0.2 percent to 4,564 points.